The Help to Buy (Scotland) shared equity scheme will be open to all first time buyers and existing home owners buying a new build home from participating home builders. The home must be a buyer's only residence and they must not own another home.
The Scottish Government will provide help to eligible buyers of up to 20% of the purchase price of a new build home from a participating home builder.
An eligible buyer will be expected to contribute a minimum of 80% of the cost of the new build home. The shared equity scheme will apply to homes worth up to £400,000 in Scotland.
The scheme is backed by the Council of Mortgage Lenders and house building industry body, Homes for Scotland, who have worked closely with the Scottish Government to develop a scheme suitable for Scotland.
The progress of the Help to Buy (Scotland) scheme will be monitored by a group including Council of Mortgage Lenders and Homes for Scotland.
‘There is no doubt that getting onto, or moving up the property ladder has become tougher in recent years. House buyers are being hampered by the lack of affordable mortgages, with high deposits often a major barrier,’ said Deputy First Minister, Nicola Sturgeon.
‘The Help to Buy (Scotland) scheme will not only help people to buy their first home, it will also help second steppers and others move to a new property. The scheme will also help support the housing industry alongside our commitment to investment in affordable housing across Scotland,’ she added.
Nicola Noble, head of mortgages at the Bank of Scotland, which is supporting the scheme, said that it will make a real difference to families in Scotland looking to purchase a new home with the assistance of a Shared Equity mortgage.
‘Innovative schemes such as this will also boost the economy as increased demand for new build homes will lead house builders to increase house construction, providing new jobs in communities across the country,’ she added.
Philip Hogg, chief Executive of trade body Homes for Scotland, believes that it will have an immediate and significant impact. ‘Not only has an extra £100 million of funding been allocated to the scheme, it has also been extended by one year,’ he commented.
Barclays has also announced that it is joining the scheme. ‘This is good news for Scottish borrowers who are looking to buy their first home or move up the housing ladder,’ said Andy Gray, managing director of Mortgages at Barclays.
Lender Nationwide is also on board. ‘It is another way that Nationwide customers can access great deals to help them onto or to move up the property ladder,’ said Tracie Pearce, head of group mortgages at Nationwide.
Paul Smee, director general of the Council of Mortgage Lenders, said that lending to Scottish borrowers reached its highest level since 2008 in the second quarter of this year, and with schemes like Help to Buy conditions are improving for home buyers.
